Commodities trade mixed, oil hit by US reserves rise

AFP, LONDON

Sun, May 12, 2013 - Page 15

Global commodities traded with mixed results this week, with oil dented by record-high US crude reserves and the strong US dollar, while investors braced for the results of a two-day finance meeting of the G7 economies.

Some commodities gained ground after positive economic data out of the US and Germany,which also helped push the US and Frankfurt stock markets to record peaks.

G7 finance ministers and central bank chiefs began talks on Friday on spurring growth, with currency factors likely to feature after the US dollar spiked to a four-year high against the yen.

On Thursday, the US dollar vaulted past the key ￥100 barrier, as Tokyo’s aggressive stimulus efforts to lift the Japanese economy continued to depress its currency.

The strong greenback makes US dollar-priced raw materials more expensive for buyers using cheaper currencies.

OIL: Prices tumbled to one-week lows on Friday, with Brent hitting US$101.56 per barrel and New York crude touching US$93.37.

The US Energy Information Administration revealed on Wednesday that US crude stocks rose to 395.5 million barrels in the week ending on May 3. That was their highest level since 1982, indicating that production was outstripping demand and putting downward pressure on prices.

Prices recoiled further on Friday as profit-taking also set in.

On Friday, OPEC said it still expected global oil demand to grow this year despite a weaker-than-expected first quarter and concerns about growth in China and the EU.

OPEC, which accounts for about 35 percent of global crude output, forecast average oil demand of 89.7 million barrels per day, up 0.8 million barrels from last year and unchanged from its previous projection.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month was US$102.42 per barrel compared with US$102.35 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for next month slid to US$94.25 a barrel from US$95.83.

PRECIOUS METALS: Gold prices pulled lower as markets hit record peaks in Frankfurt and New York.

By late Friday on the London Bullion Market, the price of gold eased to US$1,426.50 an ounce from US$1,469.25 a week earlier.

Silver decreased to US$23.37 an ounce from US$24.25.

On the London Platinum and Palladium Market, platinum dropped to US$1,490 an ounce from US$1,501.Palladium advanced to US$702 an ounce from US$694.